Options for Financing Education

By Easypolicy| 13 Jul 2012| Investment Plans

Educating child well is the dream of every parent. After all, education secures the future of your child and securing his/her future is your primary responsibility. However, with the passage of time the cost of education will also rise. There are various investment plans which can help you save and finance your child’s education. Starting early will help you save more but will also add to a dilemma as to where to invest.

There are various traditional and modern options for investment available. These can help you save for your child’s future and education.

Stock Market: Investments in the stock market is a risky venture unless you are a pro. For getting the higher returns you should have strong hold over healthy stocks and should be prepared for hedging risks. It cannot be considered a safe technique yet the returns are high.

Equities: Investing in equities can promise you profitable investments. For this you will require help of a venture capital firm and huge amounts of money for investments.

Insurance: Insurance plans act as a multi benefit investment plan option. It provides you insurance, investments returns and tax benefits. These plans are Risk free and provide satisfactory returns. It not only provides growth to your savings but also secures it in the event of death and helps you secure the future of your kid after you. Such plans are coupled with various other additional benefits which can be fruitful to you and your child in long run. This include scholarship benefits, rebate in tuition fees, assistance for co-curricular activities, etc.

PPFs: There are various Provident fund plans available with banks, post office and other government institutions. Provident funds are also available with insurance investment plans. Such plans bet to provide higher and profitable returns which can help you a lot to finance your child education.

Mutual funds: Mutual funds are the small investor funds through which you get professional assistance for profitable and risk free investment. These funds also provide you tax benefits. There is a consistency in returns even after the sudden fall of stock market.

Bank fixed deposits: Post office FDs and Bank FDs are the traditional methods of investment that people have preferred since ages. It is because of the security attached to these options. However, the investment rates of return are very low. In fact, it diminishes the time value of money. Investing in such an investment option when thinking of child’s future education can be doubtful.

NSC: Since these are supported by the Government of India, people prefer investing in them. It can be a good option and can provide secured but low rate of return. While Inflation rising high, it may not be able to cover the cost of education.

Real Estate: Investments in real estate boost heavy returns. This is because of rowing urbanization and development of infrastructure. This sector requires lump sum investment also promises investment rates to be as high as 100% and has small chances of going low. However, being fixed assets, it lacks liquidity. Also, there will be a lot of formalities required during purchase and sale of such investment options.

Gold: Investing in gold has a history in India. Right from the ages of kings and kingdoms, this is being done. For securing your child’s future investment in gold can be profitable as the value of gold keeps increasing. However, it can be risky in terms of storing such gold. Also, there are no tax benefits available on such investments.